US 'shock and audit' over Iraq expenses

At least $8bn in Iraq reconstruction funds is still unaccounted for and presumed 'wasted', a report says [Reuters]

The final breakdown of every tax dollar spent by the United States to rebuild post-invasion Iraq was presented to Congress earlier this month - a down-to-the-nickel analysis of nine years and $60bn worth of waste, arrogance and ineptitude unequalled in American history.

The conclusive report by Stuart Bowen, the Special Inspector General for Iraq Reconstruction (SIGIR), was a 186-page document titled "Learning From Iraq”, which followed that misspent money on a tragic joyride through the expensive and embarrassing mega-blunders that have become synonymous with US"nation-building” efforts in Iraq since 2003.

Clearly a must-read for any official in US-occupied Afghanistan, the SIGIR report was based on 220 audits, 170 inspections, hundreds of investigations, and, most compellingly, candid interviews with 44 senior Iraqi officials and US military and congressional leaders, including US General David Petraeus, Senator John McCain and Iraqi Prime Minister Nouri al-Maliki.

In depth

WATCHDOG WORK: During its congressional mandate, SIGIR was able to secure 104 indictments, 82 convictions and $191m in court-ordered fines.

SECURITY CONTRACTORS: SIGIR identified an explosion in the number of private security contractors, between 25,000-30,000 in Iraq.

STACKS OF CASH: In 2003 and 2004, more than $10bn in cash was flown to Baghdad on US military aircraft in the form of massive, shrink-wrapped bundles of $100 bills stored on large pallets.

Maliki, for example, told Bowen and his staff "$55bn could have brought great change to Iraq”, but the positive impact of that spending was"lost”.

Claire McCaskill, a Democratic senator from Missouri, called the teamwork between the US departments "an utter, abject, failure” and described the agencies' collaborative efforts as a "circular firing squad”.

Hassan al-Shimari, Iraq's minister of justice since 2010, said, "There was no real planning done, nor did they consult with Iraqis about what was really needed.”

Former deputy prime minister Dr Ahmed Chalabi said US personnel "viewed all Iraqi ideas as useless”.

Even General Ray Odierno Chief of Staff of the US Army, said, "It would have been better to hold off spending large sums of money until 2008, 2009, and 2010 [when the country had stabilized].”

Honest, aggressive and meticulous, "Learning From Iraq” is an important historical document, perhaps the most essential Washington-sanctioned databank for evaluating the US legacy in Iraq.

Still, it hardly explains the wreckage of today's Iraq, the impoverished, jobless, powder-keg of a nation that the US left behind, or how nine years of botched reconstruction efforts helped thrust the country into an uncertain future.

Maria Fantappie, Baghdad-based Iraq analyst for the International Crisis Group, describes a "heavy heritage of fear” that exists for an entire young generation of Iraqis for whom political instability and recurrent crisis"continuously fuel suspicion”.

“The most affected are the youth, those born during the sanctions of the 1990s and grew up in the decade since the 2003 invasion. Problems were exacerbated during that time,” Fantappie told Al Jazeera.

“Most Iraqis developed ways of coping with the additional challenges that the invasion brought: reduced mobility, increased security checks, even the worsening services.

“What they are longing for now is a state they can trust.”

Money for nothing

The final bill to the US taxpayer for rebuilding efforts in Iraq was a little more than $60bn, according to the SIGIR analysis, breaking down to an average of $15m per day.

It was not always like that, according to the report. In 2005, the daily cost was $25m and slowed down to $7m per day in 2012. Also, the SIGIR report only looks at the cash spent on reconstruction. Including military spending, the overall cost for the US invasion of Iraq was an estimated $767bn.

Even so, of the $60bn appropriated for the largest reconstruction mission conducted by the US, until Afghanistan, at least $8bn is still unaccounted for and presumed "wasted” by the SIGIR team.

The leakage was hardly lost on SIGIR's congressional overlords.

“The level of fraud, waste, and abuse in Iraq was appalling,” said Susan Collins, Republican senator from Maine who was described as the most consistent supporter of oversight in Iraq.

There are plenty of examples to prove the point:

The half-built prison sitting in Diyala province that cost the United States $40m and will never incarcerate anyone.

Basra Children's Hospital, the largest US health care construction effort at $345m, was 200 percent over budget, four years behind schedule, and is still not fully operational.

An unfinished wastewater plant in Fallujah that has cost more than $100m, and counting, and is reportedly a local joke for its limited service that will require another $87m to reach the rest of the city.

The US spent $27m to fix the Mosul dam in 2005, but an inspection in 2007 found that $19.4m worth of equipment and materials for the improvements were not being used.

The massive $277m Nassiriya Water Treatment Plant broke down immediately after transfer to Iraqi control and is considered a failure.

"What happened in Iraq was the military versus State and USAID, all of it occurring in the middle of an insurgency and nation-building mess."

- James Jeffery, former ambassador

The millions stacked up as the list went on: faulty bridges, power stations, training programmes, roads, and, most famously, the company that billed the US Defense Department $900 for a switch that retails for $7.

The SIGIR team also exposed darker elements of the US rebuilding campaign.

The so-called Cockerham kickback case led to the conviction of 22 people, and the recovery of $67.7m. Former US Army Major John Cockerham received more than $9m in bribes for awarding contracts for bottled water and other essential items. An officer committed suicide after being linked to the case and another"key player” was murdered, the report said.

Examples such as these, and many others, have had US taxpayers infuriated for years.

Former US ambassador to Iraq James Jeffery agreed: "The US reconstruction money used to build up Iraq was not effective. There were many development problems, and we didn't get much in return for the $50bn-plus we spent.”

Cross-sectional consensus

Undeniable findings emerged from the nearly 200 pages of "Learning from Iraq”.

According to the SIGIR, "The general belief across each group is that the relief and reconstruction program should have accomplished more, that too much was wasted, and that the lessons derived from the Iraq reconstruction experience should drive improvements to the US approach to stabilization and reconstruction operations.”

A more salient point was expressed by Qubad Talabani, Kurdish minister and son of Iraqi President Jalal Talabani, who told the interviewers: "You think you can throw money at a problem, you can fix it. It was just not strategic thinking.”

As the report quoted Judge Raheem al-Ugaili, "History will determine that the US reconstruction programme failed for two reasons. 1. The US government excluded Iraqis from the process of reconstruction priorities, and 2. The reconstruction effort left very little visible impact on the ground.”

Many interviewees mentioned early mistakes, namely the US' "de-Baathification” campaign that effectively fired about 30,000 government employees and the disbanding of the Iraqi Army, which dismissed about 500,000 military members without pay or pension.

Petraeus said: "When you fire the military without giving those in it a future, or fire the first four tiers of Baathist membership, they will have no interest in helping you reach your goals. Such actions only give them incentives to oppose what you are trying to do.”

Another common critique was the infighting between US officials.

"There was a bureaucratic clash of cultures in Iraq among US government agencies; its ill effects weakened the reconstruction efforts," said Christopher Hill, chief of mission in Iraq from 2009-2010.

The former ambassador Jeffrey said: “What happened in Iraq was the military versus State and USAID, all of it occurring in the middle of an insurgency and nation-building mess.”

SIGIR's account of mismanagement in post-invasion of Iraq is just the latest report that has policy-makers urging a re-think of priorities should the US find itself in another post-invasion situation.

As Senator Jon McCain said: “The paramount lesson from the Iraq rebuilding experience is the need for a complete overhaul of the US approach to stabilization and reconstruction operations.”

The clock is ticking. After all, the US has already spent more than $90bn on reconstruction projects in Afghanistan.